"False HOPE": Critical Analysis of HOPE VI Public Housing Redevelopment

A critical analysis of the serious problems with the HOPE VI (Homeownership and Opportunity for People Everywhere) program, the nation’s most comprehensive attempt to reform its public housing stock, dramatically points out the stunning lack of information on or assessment of the program, federal accountability, and service to those currently living in public housing or in need of public housing. It also proposes specific reforms.

“False HOPE: A Critical Assessment of the HOPE VI Public Housing Redevelopment Program,” released in June 2002, is the work of the National Housing Law Project, Poverty and Race Research Action Council, Sherwood Research Associates, and Everywhere and Now Public Housing Residents Organizing Nationally Together.

The critique says that, although the target of HOPE VI was the “vertical ghettos” or high rises common to New York and Chicago, only 7 of the first 34 HOPE VI redevelopment awards were for high-rise public housing developments. Federal auditors in the mid-1990s found that HOPE VI increasingly appeared to target not the most severely distressed public housing but those sites most amenable to higher-income redevelopment.

According to the critique, the real effect of the HOPE VI program, which has awarded over $4.5 billion in redevelopment dollars since 1993, is that it is reducing the supply of the nation’s public housing stock at a time when there is a drastic shortage of affordable housing for families at the lowest end of the income scale.

The U.S. Department of Housing and Urban Development, or HUD, calculates that, for every 100 very low-income renter households in 1999, only 70 affordable units were actually available, and only 40 affordable units were actually available for every 100 extremely low-income renters.

The critique finds that demolition is proceeding at a dramatic pace, out of line with the National Commission on Severely Distressed Public Housing, the independent body that the HUD Reform Act convened in 1989 to determine what was in fact severely distressed public housing. The commission found that approximately 6 percent (86,000 units) of the total stock of national public housing was considered severely distressed.

Despite this finding, HUD will  approve the demolition by the end of the current fiscal year of nearly double the number of units that the commission determined to be severely distressed. With the number of public housing units set to be replaced under HOPE VI and the number slated for demolition outside of HOPE VI, the country is facing an estimated net loss of over 107,000 public housing units.

The critique questions HUD’s justification that this loss of public housing is required to develop model “mixed-income” redevelopments without HUD ever establishing how this scheme will benefit low-income families. The critique notes that no available empirical data suggest that exposing low-income public housing families to higher-income families will have any effect on their employment or education outcomes.

HUD’s studies that support this model generally refer not to positive role models but to improved infrastructure and community services. The critique recommends instead that if mixed income truly is the goal, it can be accomplished internally—by assisting current residents to secure new or better-paying employment—without displacing hundreds of thousands of residents.

And there is HUD money available—housing authorities may use up to 15 percent of their HOPE VI funds for community and social services to increase resident opportunities as well as to enforce Section 3 resident opportunity requirements.

The critique points out that there exist no real opportunities for resident participation. Although the HOPE VI policies stress the importance of resident participation throughout, in reality there is very little resident participation and no meaningful mechanism to enforce participation rights. Relying instead on HOPE VI applications, grant agreements, and work plans, even those only in draft form, HUD has yet to produce regulations for the HOPE VI programs.

The absence of these regulations, which HUD says it has not produced because they would be “difficult to modify,” effectively discourages resident participation and shields HUD and the housing authorities from accountability under HOPE VI. Even if residents look to the HOPE VI application, for example, to determine what will happen to their particular development, the plan described in the application is generally considerably different from the actual plan being implemented.

The critique finds that realistically, despite the proclamation that HOPE VI will improve the lives of public housing families, only 11.4 percent of former residents overall have returned or are expected to return to HOPE VI sites and only about 30 percent of displaced residents are relocated with “housing choice vouchers” (formerly known as Section 8 certificates). Nearly half of the residents will simply be transferred to other public housing developments, with no meaningful rehab of those communities.

The critique reveals the growing number nationwide of “lost residents”—those families who are simply lost along the way, getting neither other public housing nor a housing choice voucher, and receiving no housing assistance. For families that are one step away from homelessness, displacement can have cataclysmic consequences.

Residents are not leaving the developments because they simply “choose” no longer to receive housing assistance. A combination of severe habitability problems, safety concerns, police and management harassment, and poor communication is forcing longtime residents out. They lose all of their rights to return to the new HOPE VI developments and potentially other supportive housing.

The critique questions the unfair readmission screening criteria of the housing authorities. For example, in general, housing authorities allow only residents in “good standing” the right to return to the development, although there is no working HUD definition of what this means, leaving it entirely to the discretion of the local housing authority. Some housing authorities in fact are prohibiting longtime residents who have been in compliance with traditional HUD standards from returning on site because of inadequate credit histories.

The critique notes the absence of  available HUD data on the success of the HOPE VI initiative. HUD currently offers only broad, sweeping statements of assumed benefit for poor families.

In light of these problems, the critique recommends the following changes:

• There needs to be an updated list of public housing developments eligible for HOPE VI funds according to a new definition of severe distress created in collaboration with public housing residents and housing advocates and experts. No more HOPE VI funds should be allocated until this is done.
• HUD must offer one-for-one replacement in HOPE VI sites or in other neighborhoods with equal access to services and amenities as anticipated at HOPE VI sites.
• HUD should issue regulations governing the administration of HOPE VI redevelopment activities; the regulations should provide start-to-finish, enforceable rights of participation for residents and community organizations. HOPE VI dollars should be withheld from those housing authorities without a proven track record of resident participation.   
• Public housing residents should be guaranteed the right to occupy units redeveloped under HOPE VI, and the relocation rights of displaced residents should be clarified and bolstered.
• All HOPE VI data and program documents should be publicly available on HUD’s Web site.

The full text of “False HOPE” is available on the National Housing Law Project Web site, www.nhlp.org/html/pubhsg/FalseHOPE.pdf.

For more information, contact Katherine E. Walz, National Center on Poverty Law, 312.263.3830 ext. 232.